About melmackuk

Unless they’ve had their head under a stone for the last 2 years, anyone in digital advertising will be aware of the current huge growth in programmatic media buying. In the US it currently makes up around 20% of digital budgets, with many marketeers planning for this to grow to 40% or more. In the UK the H2 2014 estimates are around 15% with predictions ranging up to 25% which would represent a huge 83% of all display advertising.

This presents a variety of issues for the agency and client media buyer, as new DSPs, exchanges, and technologies are launched seemingly every day. They are all (if you took each media representatives word for it) based on the most *amazing* technology, staffed with the cleverest PHD data boffins, and are therefore guaranteed to be the single best way to approach programmatic buying.

I have sat through so many powerpoint presentations in the last year with different coloured and shaped variations of diagrams aiming to represent the stack of technology and the billions of bidding decisions and data points being utilised, that I must admit to now being a bit powerpoint-blind.

In most media buying scenarios, you have an easy way of testing such a competitive market, which is to test them all over a set period of time and see whose technology wins according to the KPIs – volumes, CPAs, new business, what have you.

Sadly, testing multiple DSPs at the same time is at best impractical, and at worst, a way to invalidate results, waste a whole pile of cash – and annoy your customers all at the same time.

Here’s why:

1) Cookie bombing

In an all out competitive bun-fight, it’s not infeasible that one or more of the media partners will simply buy the cheapest mass inventory they can find, in the hope that having their cookies on as many devices as possible will mean that they’ll get (view) credit for more conversions, without actually having an impact on the user. This is especially risky in mass market scenarios, where many users will be buying/interacting anyway, and serving ads willy-nilly (especially if over half of them aren’t even seen) is basically a bit like cheating. Think of it as the shotgun approach – something will get hit, if you spray wildly enough.

2) Frequency & Bidding against yourself

With multiple buyers aiming at the same goal, and especially so where the market is smaller and necessitates re-targeting based on 1st party website data, there is a risk of this smaller target market seeing multiple ads from multiple providers, all in the same day. Not only is this wasteful, but risks annoying the very people who are or should be your best customers. Of course you can cap frequency at a campaign level but will it be real-time enough to capture all impressions in-flight and prevent the risk totally?

To make matters worse, if more than one DSP is bidding for the same user simultaneously, then they could be bidding against each other, and inflating the price which will, of course, be passed on the the advertiser.

3) Attribution & Fair testing

In such a DR driven sector like digital, display advertising naturally struggles for justification against such monsters as the SERP. Justifying impression-based sales, showcasing brand building and early-funnel strategies through clever use of first-touch and assist data are critical to ensure it gets the credit it deserves.

Adding complexity to the campaigns, competition for each customer touch point and making the true impact harder to see amongst the vast weeds of data is not going to result in a clearer view. The risk is that the widest/more scatter-gun approach will pay off, potentially leaving clever targeting & higher impact placements losing out.

If you can’t see the true result of your test, then it becomes pointless. This is where the amazing data capabilities of digital become a handicap rather than a help, as it becomes impossible to make business decisions based on the results, and hence they add nothing except data for data’s sake.

It doesn’t mean that you have stick with what you have – far from it, but there are measured ways to test more than one programmatic provider, which I’ll be covering in my next post.

I am very lucky to have seen the media world from various angles; working for over a decade in media sales starting with computer magazines through to digital display, affiliate and email; then spending 7 years planning and buying online media at agencies, and finally ending up where I am now, doing digital marketing contracts within client organisations.

The journey has taken me a long time, but as a result I now have some pretty good insights into why you should or shouldn’t use an agency and also what it’s like to walk in the shoes of those involved.

My main take out has been that we will all do our jobs better if we understand more about the context in which our internal and external partners work; and it is for this reason that I’ve previously summarised The Top 5 tips for Selling Media to Agencies. To continue with the theme, with a few more months experience working client side, today I give you The Top 5 Agency Tips to Keeping A Client Happy.

1) Find out what it is they’re judged on

Each time you take on a new client, a new product or campaign within an organisation, your most important priority is to set the goalposts. There is no point working painstakingly for weeks on a campaign that builds reach and frequency if the client (or the client’s boss) is only going to ask “How many sales did we make?”. Similarly if you are able to report on digital sales only, but don’t get to see offline or unattributed sales fluctuations you may be seriously hampering your campaign’s performance and under or over reporting the impact it has on the client’s bottom line.

And the bottom line is always the bottom line. I have yet to find a client who doesn’t end by judging their media by the financial impact it has, nomatter how much they say they want to be innovative and “go beyond the banner” and have cut through and win awards. It’s money, plain and simple.

You can make your life even easier by putting this one figure at the top of your report each day/week/month. Why make the client scroll through lines of data when the only figure their boss asks is “Are we up or down?”. Give them that figure at the top, big and bold with context (week on week, month on month, year on year), and then explain more later. Don’t make them search for it.

2) Pro-actively send them information

I know only too well about the resource pressures within an agency environment, but

if your job is to provide the client report on Monday by 10 O’clock, DO IT!

Don’t wait till they natter, don’t think you’ve got a few hours leeway if they don’t seem to have noticed. That time will have been set for a reason – they may have a sales or board meeting at 11 where they will be asked about the figures. If they’ve been stuck in another meeting until then, and are relying on you to have sent the data through so they can access it on the fly, do you want to be the person who makes them look stupid in front of their board?

If there are operational reasons why it’s difficult to get the data to them at that time – the ad server hasn’t updated sales, the report is bespoke and complex and can’t be done that quickly – then sit down with them and ask them what they can get away with. Many a time I have sent a client simple preliminary data (with caveats) only to follow up later with more mature data with a full analysis. Believe me, when the report lands in their inbox your client will breathe a sigh of relief because NOMATTER WHAT IT SAYS, some data is better than radio silence.

Resource pressures allowing, try to always give them more information that the basic SLA states. If you show interest in their business and show examples of something relevant that another client has done, some media developments as a stimulus or do a bit of extra digging in competitor trends for some context, they will be nothing but happy. This point really matters when the client comes up for pitch, as you can guarantee that the other agencies will throw all sorts of innovative solutions at them to show the difference they can make, and the last thing you want is “Well, we stopped sending you ideas as you always said No.” to be your excuse when they mark you down and you lose the pitch on innovation.

3) Don’t insult their decisions

I’ve said this before (here) and I’ll say it again – they may have access to information that you don’t have. So…

EVEN IF THEY SEEM TO BE TOTALLY INSANE do not insult the decisions they make.

By all means ask questions about them, state (politely) why you may have done things differently and make caveats in your forecasts where you think these decisions will impact negatively on the performance metrics that you can see, but it is the height of arrogance to assume that you know their business better than them. You may know media, you may know how to get people to their website, but you are probably not seeing a whole pile of data that gives an entirely different context to performance.

An example of this is using ad server/search tool data as gospel. Recently I had to stop an agency from continually over optimising an account, reducing potential lead volumes based on AdWords data, when the data of record for the company was the Google Analytics integrated search CPA, which was much healthier and meant that rather than reducing spend/bids, they could have been a lot braver.

Had they been given access to the data? Yes.

Did they bother looking? No.

Did they send a report that criticised my decisions based on their incomplete data? Yes.

Will they remain our supplier for long? No.

4) Find a positive in everything

Sometimes things go wrong in business and marketing. Products fail or get bad PR, messaging doesn’t create any impact, a competitor launches a spoiler. Recessions happen. Sometimes it’s the media choices, season, targeting or forecasting. Sometimes you just don’t know. But there is ALWAYS something you can learn from a campaign. Even if that thing is “We won’t do it again in that way”.

There is nothing more depressing for a client to receive (or, I imagine, an agency account manager to write) than a post-campaign report where the results have fallen far short of the forecast or target, especially if there’s no obvious explanation; but you can rescue the wreckage by highlighting ways that other clients have improved things when faced with a seemingly dismal failure. One way to change the way you put things in context is to always to have 10% of your budget allocated to testing new things (especially in the ever changing digital world). This means that any test that fails is not seen as the end of the world, and instead a fundamental part of the development process.

If you call it a test and it fails, it’s a learning.

If you call it a plan and it fails, it’s failure.

I know which one I’d be happier to discuss with my client/boss.

5) Tell them the “So what?”

Data. We’re all drowning in it. And the data you send to your client will be only a tiny part of the data they see each day.

Digital media’s very trackability is the reason it remains the healthiest part of the advertising market (granted, it is also a stick with which it can be beaten). The result of all this data can be inertia as we all struggle to put it into context and gain anything actionable. This is where you can make your client look like a superstar.

Here’s some online sales data. I’ve graphed it as a monthly trend. It still means nothing unless I know how it compares to

other companies doing the same thing

seasonality expectations

my own company/product performance in the past

my forecasts and targets

Good or bad are all relative concepts, and it is your job to take your client from data driven inertia to the “So what?” – think about what it means. How different is it to what you expected – AND WHAT DO YOU RECOMMEND THEY DO ABOUT IT NOW?

Give them potential actions to take to their boss, even extreme ones to get them thinking.

Do they choose between:

cancel the project

change the creative

recall the product

change the media mix

add international markets

double the spend

change the landing page

expand the product range

add a phone number

For every campaign learning, there should be a recommendation that the business can do to either capitalise on it, or avoid it in the future. State these and give your client an action plan to test these new recommendations (remember, tests don’t fail, they become learnings), and then you have a process of constant testing and learn, that WILL lead to success over time.

This week one of my old clients, Direct Line, announced that it was setting up an in house agency. Apart from wincing on behalf of the incumbent MediaCom (and the amazing team I worked with who ran their paid search) this is a reflection of a lot of soul searching in the marketplace – and the question that I’ve been asked a lot in the last few months, namely “Would you recommend running digital marketing in house or through an agency?” – to which I don’t think there is a perfect answer.

Agency Pros.

The biggest benefit of using an agency is the flexibility and scalability to get things done. A dedicated team of experts, learning from a larger pool who work across various markets and hence can apply learnings quickly and easily, and hopefully avoid repeating the same mistakes or re-inventing the wheel for each individual client.

In addition to this there is a reduced staff overhead and capital expenditure to service marketing campaigns and plans that may not be always on, or to the same level – and therefore would entail a constantly fluctuating need for staff and possibly office space.

Traditionally the buying power of agencies has been seen as a major benefit but this is increasingly irrelevant in a growing digital world. Yes I’m sure the clout of the big agency networks still carries weight with TV and large print publishers, but there is only so much volume an agency can guarantee to secure the best rates without locking their clients into inappropriate media choices.

Digital media runs overwhelmingly on performance based buying models, either as a CPC/CPA. Even a low CPM buy only remains justified as long as the “effective CPA” formula works out at the back end. This means that the perceived value of the media is out of the hands of the media owner, and the old sales negotiation model is defunct.

The increasing combinations of media, client and social interaction data that enables Real Time Bidding mean that in theory any agency, technology or platform partner can and does engage in arbitrage through buying cheap network and exchange inventory, adding value with layers of data and selling on to the advertiser at whatever they can get away with.

As long as the client gets the customers they want at a rate that makes sense for their profit margins, this may seem fair, but when part of the cost they pay is driven by their own data, one could very rightly say that they should not be paying this premium, except maybe for the usage of the technology that enables it.

The elephant in the room

The agency world is a scary place to be right now. Recession has brought increasing pressure on client margins, meaning marketers and procurement departments are constantly picking away at agency fees – demanding more for the same fees, or indeed lower; with the constant threat of pitches used to keep the agency in line.

Agency fees are being pushed lower through supply and demand, and they race to economise and automate to make the figures add up. Meanwhile, (like the proverbial swan on the water with madly flapping legs) operational staff are running just to keep still, keeping abreast of all the changes in digital that mean entire tracking and attribution models are rewritten each year; new media, channels and delivery mechanisms are added monthly and still the ROI machine says:

MORE MORE MORE!

CHEAPER CHEAPER CHEAPER!

The nature of a market reducing fees and profitability even while it becomes more complicated and labour intensive is guaranteed to create pain for the people on the front line. It undermines agencies’ ability to invest in systems and procedures that would enable efficiencies, and inevitably means that mistakes are made, clients don’t get what they need and eventually the dreaded pitch becomes reality after all.

So the account goes to another agency, and the process begins again.

It’s painful, it’s bad business for both parties but it’s almost impossible to stop. Without a wholesale re-think of agency fees, values and expectations the impact of digital has been to make it harder to service clients profitably, just at a time when they need the most expertise. Not surprising then that they’re thinking about setting up their own talent pool.

In House Pros.

Outsourcing, silos and business change: The marketing world has always had to adapt as the consumer changes, and now that process is faster than ever. The ways that the consumer has changed now impacts more than just how you market to them. It’s how you sell, how you transact, your channel to market and how you follow up, it’s customer service, complaints, reviews and approval and advocacy and sharing. Every touchpoint is now possible across a variety of devices – and worse – bad experiences can be shared to the point of going viral worldwide in minutes, potentially destroying years of product development and business planning (Dasani in the UK, anyone?)

What this means is that the entire business often needs to change, sometimes radically, to adapt to consumer preferences. How fundamental this change needs to be can be masked if your comms are handled by external partners, plus also de-skilling your own internal staff.

Multiple teams within an agency, multiple agencies dealing with multiple product, marketing and discipline teams within a client means that the helicopter view that says “Whoa, we really need to change this!” gets missed, and each part of the machine keeps working to its own disparate aims without a central unifying mission or understanding.

Of course this can happen within an organisation too, it is not restricted to services that are outsourced, but you can guarantee that more disparate entities involved in something, the more difficult it is to integrate.

Data, data and more data: In a perfect world all marketers would have robust MI data that truly reflects the impact of their activities. By this I mean more than just to initial sale, but attrition and lifetime value metrics that can hugely impact the ROI of marketing. Too often it isn’t shared either internally or with stakeholders such as agencies – sometimes through politics or negotiation tactics; and often just because it’s a headache to export and see in any meaningful way even internally. My point is that the more actionable data we all have, internal or external the better job we can all do.

So the answer seems to be that whether internal or external, the most important issue is about integration and data, and having a digital leader that understands the nitty gritty, but is also able to capture the big picture and translate it into business actions.

Good agency staff care as much about your business success as you do; good marketers know that a customers’ interactions are a function of more than just the media plan.

It turns out that good business people are good business people wherever they work, so if you find the right person – keep that person – wherever they are.

There was a really interesting article on digiday this week about retargeting and how the industry enthusiasm for it is risking the health of retargeting, and increasing resentment for online advertising as a whole.

To give some background, the display ad industry has suffered from a reduction in the perceived value of their ad inventory ever since the industry’s inception. Many cost models now exist (CPC – cost per click, CPA – cost per action) but the original pricing model for online inventory was the CPM (cost per mille, yes I know it’s french but it means cost per thousand to the ordinary person). By cost per thousand they mean cost per thousand impressions, and an impression is counted each time one ad is served (each ad may have multiple images within a loop, a drop down or other engagement and run multiple times, but until the ad itself is clicked, or another link on the page, that still counts as only one impression).

When I first started in online at MSN in *cough* 1999, we asked for, and (sometimes) received, £26 CPMs for untargeted Hotmail inventory, and £29 for targeted inventory which then was only available based on content, not user demographics or any other criteria. Due to limited availability the MSN business channel was always sold out at a rate card of £29 CPM, while we’d do deals for, say £15 for Run of Hotmail, and run a LOT of house and charity ads.

That was during the dotcom boom, however, and things had to change, if only because all the 19 year olds with random website ideas (and funding) either became gazillionnaires or failed miserably. What remained after the chaos was real businesses doing real things and having to use a proper calculation of profitability to justify their share value. That coincided with added trackability of online, past the point of click and all the way to sales or leads that could be attributed back to a media campaign.

Trackability allowed a realistic value assessment (which became a stick with which to beat the display sector), and the huge growth of consumer usage of the internet meant that billions of available impressions were being added to the inventory of websites each month. Within a couple of years we also had networks brokering deals for massive volumes of blind remnant inventory that the publishers just wanted to make *something* from, and the CPMs kept tumbling.

From a few pounds in the mid 2000s, CPMs kept tumbling to sub £1 levels for large buys, meaning display publishers were constantly struggling to make money from their users, and the “pile it high, sell it cheap” approach was a self fulfilling disaster for advertisers as the vast majority of the inventory was wasted.

As users gradually became blind to the banner (the dominant 468×60 pixel image that held sway for a while), click through rates also fell from single figure %s to less than 0.25% meaning every advertiser and publisher was scrabbling to buy as cheap as possible as this was the only way to make the performance figures add up.

It didn’t help that all this was happening at the same time as the growth of search advertising, which with a CPC (cost per click) pricing model was a lot less risky than display, and also fits into the user journey much closer to the final sale, the death knell of display seemed almost palpable.

and then along came retargeting….

Retargeting hinges on cookies. Basically once you have interacted with an ad (clicked on it) or visited an advertisers’ website – anything that can result in a cookie on your PC, you are potentially identifiable (not personally but as a string of text/numbers) as someone who has done this action. This means that advertisers can either a) serve you a specific ad or b) in some instances decide not to advertise to you at all depending on the actions you’ve taken.

Here’s an example:

Yesterday I went on the BHS website to look at lighting in their sale.
Today when I visit the Huffington Post website, this is the ad I see – featuring the exact products I looked at yesterday:

This is a retargeting ad, and is possible because the cookie on my PC captured data of what I was looking at, and BHS have bought a retargeting campaign, probably from a large provider like Criteo or Struq, stating that they want to target people who’ve been to their site and abandoned items in their shopping baskets, to persuade them to come back and complete the purchase.

Brilliant stuff. This works like a DREAM compared to standard display ads.

Target market – BOOM.

In purchase mode – BOOM.

Relevant products – BOOM.

Happy users – BOOM.

No ad wastage – BOOM.

Inventory gains value – BOOM.

Comparative click through and purchase rates went through the roof, ads are capped to only show 4 times per user to avoid annoying them, suddenly display gets back on the media plan, and everyone’s happy, right?

In theory yes, except like pop ups in the mid 2000s, the most successful ad type gets used to the point of saturation. Many advertisers will now only use display for retargeting, and in their enthusiasm for it, they use multiple providers to serve the same campaign. The result of this is that the frequency capping becomes 4 per network or exchange (and many advertisers use several) so the user can see the ad 20 times+. Plus the complexity of managing this many campaigns means that it’s also unlikely they’re pulling client 1st party data through to show whether the sale was actually made or not – so, as in my case I’VE ALREADY BOUGHT THE DAMNED THING!

How likely is it that customers enjoy this experience and are encouraged to return another time?

Easy answer. It’s not.

<rant>

Given the amount of times that I see an ad after I’ve bought the product, or an insane number of times you’d think that it was difficult to prevent this happening, but it isn’t at all.

Any agency or advertiser using retargeting who doesn’t manage cross campaign frequency is risking not just their own customers, but increasing resentment for the whole online ad sector. And for crying out loud, drop a cookie when people buy so they don’t keep seeing it ad infinitum.

Supply and demand pressures in digital staffing aren’t about to let up any time soon

If I were a recent graduate or a specialist in offline I’d be busy teaching myself AdWords RIGHT NOW (why aren’t more of them, really?)

Let’s have a look at growth in advertising spend

IAB / PwC Digital Adspend H1 2012

The ad spend trends from the first half of 2012 give us some data to prove what we all know within the digital industry – not only is digital now the single largest part of all advertising spend (28% over TVs 26% of all advertising spending) but it continues to grow at a recession-defying pace.

With the advertising market overall predicted to have grown by around 3% over the whole of 2012 (source Campaign), digital advertising jauntily grew by 12.6% year on year in the first half of 2012, with paid search maintaining its place as both the largest portion of this (59%) and the fastest growing (15.9% year on year).

This of course is great news for those of us in this industry – our jobs are relatively secure in a world where many other sectors are shedding staff in droves. What these figures don’t tell of course is the underlying story of staff churn and salary inflation created by these figures.

Having worked in digital since 1999, and agencies since 2005 I’ve been a grateful career benefactor of digital supply and demand, and also seen the impact of these issues first hand as manager of digital and search agency teams.

When I joined MediaCom to run the UK paid search department in 2011 I inherited a team of 38 people that had been churning at a rate of over 75% for the last two years. The reasons were many but not unfamiliar – a great training ground created a bank of very employable staff, who were approached weekly by recruitment consultants/other agencies and offered hugely tempting salaries – which are easy to afford if you don’t have to fund the costs of training or unproductivity for new and management staff during the training process.

Add this to the youth of the agency sector and the fact that most graduates start with a huge debt burden, and it’s not surprising we have the perfect storm for huge staff churn, with all its negative effects on team morale, consistency in client work and time spent recruiting rather than making our teams and our work better. Inc.com has a great article about staff turnover and why it should worry you, and it’s mostly about the vicious circle effect. Churn begets churn, and these factors are just amplified in an industry that’s growing at such an enormous pace – you are running just to keep still, so larger-than-average churn just makes the job even harder.

My approach has always been to treat business as personal. Every decision that we make has an impact on our colleagues, clients and the wider community and it pays to remember that the people you meet will be around to help or hinder you for the rest of your career. Now that any mishap in business or personal life can also be broadcast across the entire Twittersphere within moments, it’s even more important that we are personally involved and authentic in all our professional relationships –besides – who wants to live 1/3 of every day as someone you’re not?

It can’t all be lovely fluffiness of course – we all have bills to pay and clients to service – so for this reason when managing a team I use a two pronged approach to all people management tasks:

Structural foundation: No organisation can work without the building blocks of what, who, and how. Each role within a team needs to have a job description, a personalised set of objectives for each member (based on their client mix, their skills and career aims, and the market’s possibilities), that ensure that the client’s and business needs are fulfilled.

In something as fast changing as digital, with new technologies and partners, the operational tasks that make up the objectives are likely to be changing on a regular basis, so as a minimum 1:1s are needed every 3 months to check that things are on track and the world hasn’t changed under our feet. The detail of the steps may change but career progression needs to be clearly signposted and recognised when it is achieved. Nothing is more demotivating than the goal posts moving mid-way though the game – to your detriment.

The personal approach: One of the best known theories in psychology is Maslow’s hierarchy of needs in which Maslow contends that once we satisfy our basic physical needs (food, shelter), we move onto satisfying social and status needs, and finally work our way through to self-actualisation – and hopefully finding a real purpose in our lives. Taking the workplace as a microcosm of society, we can have people at multiple levels of this hierarchy within any one team, and crucially it will not necessarily correlate to their career maturity. There will be some who are grateful to just have an income, those who desperately need more money, some who embrace the new and require fast progression or a new job title, and those who need flexibility around their family needs or just want to be with their friends. As a manager our role is to figure out what each team member’s drivers are, and how to satisfy those within the realms of our professional and personal capabilities.

The point is that there is no all encompassing perfect approach – it is different for each member of staff, and keeping up with them all certainly keeps us on our feet. Happily my tenure at MediaCom search saw the staff churn levels from 75% to 28% within less than two years, so I am taking that as a sign of success.

Oh, and remember – you can’t win them all. When people do leave; as they sometimes will for reasons outside your control; let them leave with a smile. You will come across them again – I promise – and you’ll be glad to.

Last week eBay threw its gauntlet down by publishing its internal study which found paid brand search advertising “ineffective” (to the point of negative ROI) and non brand search to have a very small impact, and even that only on the least valuable customers.

I wouldn’t be overly concerned for Google’s share price. This is just the latest sabre rattling in the SEM market between one of the world’s biggest search advertisers and the dominant supplier (Google) who given their 80%+ share in most markets, and their resulting ability to ‘make or break’ a business are seen as a “frenemy” by many clients and agencies.

Proving ROI for the wide area of non-brand search and the rest of digital is a complicated issue, which I discuss in more detail in my post on digital measurement and attribution, so I’ll save my comments today for the issue of “brand” search and how to tackle it.

The term “brand” search normally refers to the name of the site concerned – often its domain, derivatives of this plus misspellings. To take an example of a well known UK retailer, terms that would qualify as “brand” search for Marks and Spencer would be (I won’t go into match types here & now):

Once upon a time search terms like these were offered some protection by Google’s Trademark policy, meaning that trademark owners could register as such with Google and prevent anyone other than themselves (and their chosen list of resellers/affiliates) appearing in the search results.

Most weeks at agencies we’d spot a cheeky affiliate bidding outside office hours, trying not to be caught; or receive a furious call from a client who’d seen a competitor seemingly bidding on a brand term. We’d dutifully report the instance and send a screenshot to Google and then wait impatiently while they were hopefully removed. It was a constant round of chasing and frustration, and took up a lot of our time.

Google had an entire team of people dedicated to checking and implementing the restrictions, although the offences weren’t always as clear cut as they may have seemed. An advertiser whose brand name included a “generic” term could find that competitors ads would appear against their results through a process called “broad matching” – so “Toys R Us” may trademark the whole search string, but they couldn’t stop competitors appearing who had bid on the term “toys”. Lots of work for all involved, with the added issue for Google that if advertisers could protect their own trademarks, they wouldn’t have to bid on them, so Google made less money. So guess what Google did in 2007?

You’re right.

They removed the trademark protection policy for keywords (it still applies for ad text – so you can’t say ‘We’re better than competitor x’ or ‘We sell iPods’ if you don’t), which made everyone panic and assume there’d be a free-for-all as soon as all advertisers could bid on each others’ brand names.

What had been underestimated was whether it was going to be commercially viable to bid on competitor terms or not. Given that the more relevant a keyword is, the lower the cost (I’ll expand on Quality Score also at a later date) competitor terms tend to have a higher CPC than your own, so each advertiser has its own ROI metrics to decide if competitor bidding made sense for them or not. Not quite the panic that was predicted (Y2K anyone?) but even without competitors muddying the water, whether or not to bid on your own brand is just about the most frequent question that still occurs across paid search.

After much consternation at the time of the change, various factors led to the current status quo, which is that “brand” keywords such as those above make up a large proportion of many PPC advertisers’ spend, sometimes the vast majority. It’s not surprising then that marketers will often ask the question:

If they’re looking for me anyway will they come to my site even if I don’t appear in the paid search results?

and thus

Can I turn off my brand search terms and either save the money or invest it in other keywords or channels that will provide me with incremental traffic and sales?

The answer is …. yes occasionally. But this applies to only a very few advertisers …. and it depends on various things.

Natural search results:

The single most important factor in making this decision is where your listings appear in the natural (organic) results. 70% or more of all clicks on a results page are on the natural search results, so your potential traffic is limited if you’re not appearing.

Tips:

Page 1 in natural? Test brand search on/off across similar seasonality and track combined search plus direct-to-site traffic levels to see the impact. It can go either way, and it can differ depending on your offline marketing activity/seasonality.

Page 2 or later in natural? You may as well be invisible. Use PPC to ensure your potential customers find you.

To show an example for Marks and Spencer:

Marks and Spencer brand search screenshot

Their site takes up the vast majority of the results page because they’ve used all the methods available to dominate the space

they are the first result in natural search

they have natural site links (the sub links beneath the main result)

they have a Google+ page

they have their store locations registered with Google places so the nearest store shows up on the local results too

This dominance serves both a practical and a branding purpose. The searcher is offered very few other choices other than to click through to the M&S site; plus they are reassured that they have come to the right place with stimulating social content and useful location information that should help both their online conversion and possibly drive store visits too.

Competitor activity:

As we’ve seen above, there’s nothing but cost to stop your competitors bidding on your brand name, so the levels of aggressiveness in your marketplace will have a huge impact. Some clients will pursue a disruptive strategy to buy market share even if it isn’t profitable at first, in order to either gain future sales from those customers.

I had a large auto client once say to me;

“I’m pretty sure that if someone can afford to spend £50K on a car, they can find my website.”

My answer then is my answer now;

“Yes, I’m sure they can. And they can equally as easily find your direct competitor sites.”

The issue is that with online, everything is easy. It’s not like the offline world where a customer walks into a showroom and then has all the glossy cars and the smell of leather to seduce them, or the fact that it’s a faff to get the kids in the car and drive to the other luxury car showroom to make them stay. All they have to do is click a different link, and the competitor has just as high a chance of sending them a brochure/developing a relationship with them as you do.

Of course people develop emotional relationships with car brands, as they do other high involvement purchases, but there will be many who have a shortlist of more than one brand – and do you really want to take that chance?

An example for Go Compare, the price comparison site:

Gocompare brand screenshot

The UK insurance market is cluttered and competitive, with many well known brand name insurers, plus the price comparison sites – many of which are now brands in themselves.

The search above is for the brand name derivative “gocompare” – and in this instance you can see that the competitors Confused.com and Compare The Market are bidding on the brand term, which dilutes the dominance that they would otherwise gain from their successful natural search results, and the Google+ page.

Confused and Compare The Market won’t do this for fun – they do it for hard nosed economic reasons, and it must be worth their while to pay the higher CPCs their competitor terms will demand. To me it shows that where the products are homogeneous (and/or price elastic) then searchers are highly likely to be tempted elsewhere even if they have expressed a preference in their initial search.

Tips:

Where your market is aggressively competitive, always bid on your brand term, and consider using ad text stating “official site” to give people reassurance and prevent last minute leakage.

Consider a joint search strategy with your resellers and affiliates to help you to dominate the brand term space. You will lose some margin but prevent the click going to an outright competitor.

Branding, business as usual and campaigns:

One of the main differences between paid search and SEO activities is the speed with which you can see results, and for this reason you may consider continuing to use paid search for campaign driven activity, even if an “always on” approach doesn’t pay dividends.

Natural search results are something that take a long time to build. They are based on the authority, readability and quality of the content on your site and as such, shouldn’t be messed around with for a short term gain. The last thing you want is your natural search results saying “Sale On Now!” when it in fact ended weeks ago, as this is a bad user experience and will mean customers do not believe you the next time.

For sales, new product launches – any communication that differs from business as usual, then PPC is the ideal channel.

Example of Thomas Cook:

Thomas Cook screenshot

In this example, Thomas Cook have great natural search positions, location results, Google+ and comprehensive natural sitelinks, but still choose to run paid search ads to promote their summer holiday deals, and to capture email addresses for future eCRM activity.

Tips:

If it’s worth running a campaign in offline/other media, then it’s worth repeating in PPC.

Increasing dual and triple screen usage (TV, tablet and phone) means that TV spots times are immediately mirrored by brand search trends. Spending millions on TV only for people to get lost whilst looking for that promotion online is a leaky bucket directly to your competitors. Don’t stimulate demand and then fail to scoop it up.

Phone Book versus Yellow Pages.

The examples above have been for e-commerce sites and concentrate mostly on acquiring new customers, but one enormous factor that causes resentment amongst marketers is having existing customers click on the paid search link, when they are visiting purely to log into their account, interact with customer services or heaven forbid – make a complaint!

Most advertisers that have long term customers avoid using brand PPC for exactly this reason (have a look at British Gas, O2, Tesco, Barclays Bank for instance) and as long as their natural search is healthy, this isn’t the end of the world. It is a bit like having the free listing in the phone book or Yellow Pages, you’re there, you’re findable but aren’t going to get the customer particularly excited.

One thing to bear in mind for this approach is that your homepage will need to be easily editable with campaign information, to ensure that any campaigns that do get run elsewhere can easily be followed through rather than lost in the usual clutter. If you have 6 month code release windows, you may wish to run a PPC campaign rather than fight with IT.

A special mention should be made here for those who continue to advertise heavily in brand PPC with a standard message even with strong page dominance, such as Ladbrokes, Sky TV and Expedia.

You can look at their approach in two ways, the purist commercial or the customer centric way:

they are blending their (cheap) brand search results with their (more expensive) lower performing parts of their campaign, and this is artificially inflating the incremental value of their brand search;

or

they’re genuinely trying to just make it easier to find them, like having a freephone number

Either way, they have their reasons and as in most marketing decisions, it’ll be a blend of hard numbers, branding, a bit of finger in-the-air and “the boss likes it”.